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8/11/2019 E-Com Notes (Chapters 6-9)
1/79
eCommerceNotes102
PartTwoofTwo
2010
ShrenikKenia
V.I.T.
11/1/2010
8/11/2019 E-Com Notes (Chapters 6-9)
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Vidyalankar Institute of Technology Page 1
ContentsEBusinessIntroduction....................................................................................................................................................2
EBusinessStrategies......................................................................................................................................................15
IntegrationofApplications.............................................................................................................................................24
ECommerceInfrastructure............................................................................................................................................46
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E-BusinessIntroduction
E-Businessvs.E-commerce
While some use ecommerce and ebusiness interchangeably, they are distinct concepts. Electronic business,
commonly referred to as "eBusiness" or "ebusiness", may be defined as the application of information and
communicationtechnologies(ICT)insupportofalltheactivitiesofbusiness.Commerceconstitutestheexchangeof
productsandservicesbetweenbusinesses,groupsandindividualsandcanbeseenasoneoftheessentialactivities
ofanybusiness.ElectroniccommercefocusesontheuseofICTtoenabletheexternalactivitiesandrelationshipsof
thebusinesswithindividuals,groupsandotherbusinesses.
ECommerceIsaparticularformofeBusiness.Electronicbusinessmethodsenablecompaniestolinktheir internal
andexternaldataprocessingsystemsmoreefficientlyandflexibly,toworkmorecloselywithsuppliersandpartners,
andtobettersatisfytheneedsandexpectationsoftheircustomers.ComparedtoeCommerce,eBusinessisamore
generic termbecause it refersnotonly to informationexchanges related tobuyingand sellingbutalso servicing
customersandcollaboratingwithbusinesspartners,distributorsandsuppliers.
EBusiness
encompasses
sophisticated
business
tobusiness
interactions
and
collaboration
activities
at
a
level
of
enterpriseapplicationsandbusinessprocesses,enablingbusinesspartnerstoshare indepthbusiness intelligence,
which leads, in turn, to the management and optimization of interenterprise processes such as supply chain
management.More specifically,eBusinessenables companies to link their internalandexternalprocessesmore
efficiently and flexibly, work more closely with suppliers and better satisfy the needs and expectations of their
customers.
In practice, ebusiness is more thanjust ecommerce. While ebusiness refers to more strategic focus with an
emphasison the functions thatoccurwhenusingelectronic capabilities,ecommerce isa subsetofanoveralle
businessstrategy.EcommerceseekstoaddrevenuestreamsusingtheWorldWideWebortheInternettobuildand
enhancerelationshipswithclientsandpartnersandtoimproveefficiencyusingtheEmptyVesselstrategy.Often,ecommerceinvolvestheapplicationofknowledgemanagementsystems.
Ebusiness involves business processes spanning the entire value chain: electronic purchasing and supply chain
management,processingorderselectronically,handlingcustomerservice,andcooperatingwithbusinesspartners.
Specialtechnicalstandardsforebusinessfacilitatetheexchangeofdatabetweencompanies.Ebusinesssoftware
solutionsallow the integrationof intraand inter firmbusinessprocesses.Ebusinesscanbe conductedusing the
Web,theInternet,intranets,extranets,orsomecombinationofthese.
Basically,electroniccommerce(EC) istheprocessofbuying,transferring,orexchangingproducts,services,and/or
information via computer networks, including the internet. EC can also be benefited from many perspective
includingbusinessprocess,service,learning,collaborative,community.ECisoftenconfusedwithebusiness.
Inecommerce, informationandcommunications technology (ICT) isused in interbusinessor interorganizational
transactions (transactions between and among firms/organizations) and in businesstoconsumer transactions
(transactionsbetweenfirms/organizationsandindividuals).
In ebusiness,on theotherhand, ICT isused toenhanceonesbusiness. It includes anyprocess that abusiness
organization(eitheraforprofit,governmentalornonprofitentity)conductsoveracomputermediatednetwork.
A more comprehensive definition of ebusiness is: The transformation of an organizationsprocesses to deliver
additionalcustomervaluethroughtheapplicationoftechnologies,philosophiesandcomputingparadigmofthenew
economy.
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Threeprimaryprocessesareenhancedinebusiness:
Production processes, which include procurement, ordering and replenishment of stocks; processing of
payments;electroniclinkswithsuppliers;andproductioncontrolprocesses,amongothers;
Customerfocused processes, which includepromotional andmarketingefforts, sellingover the Internet,
processingofcustomerspurchaseordersandpayments,andcustomersupport,amongothers
Internal management processes,which include employee services, training, internal informationsharing,
videoconferencing, and recruiting. Electronic applicationsenhance information flow between production
andsalesforcesto improvesalesforceproductivity.Workgroupcommunicationsandelectronicpublishing
ofinternalbusinessinformationarelikewisemademoreefficient.
EBusinessgoes farbeyondecommerceorbuyingandsellingoverthe Internet,anddeep intotheprocessesand
culturesofanenterprise.Itisthepowerfulbusinessenvironmentthatiscreatedwhenyouconnectcriticalbusiness
systemsdirectly tocustomers,employees,vendors,andbusinesspartners,using Intranets,Extranets,ecommerce
technologies,collaborativeapplications,andtheWeb.
Ebusinessisamorestrategicfocuswithanemphasisonthefunctionsthatoccurwhenusingelectroniccapabilities
whileEcommerceisasubsetofanoverallebusinessstrategy. Ecommerceseekstoaddrevenuestreamsusingthe
World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve
efficiencywhileElectronicbusinessmethodsenablecompanies to link their internalandexternaldataprocessing
systemsmoreefficientlyand flexibly, toworkmore closelywith suppliersandpartners,and tobetter satisfy the
needsandexpectationsoftheircustomers.
EBusiness isat theenterpriseapplication levelandencompasses sophisticatedb2b interactionand collaboration
activities.EnterpriseApplicationSystemssuchasERP,CRM,SCM forman integralpartofeBusinessstrategyand
focus.
CriticalFactorswithrespectofe-Business
EBusiness supportsbusinessprocessesalong theentirevalue chain:Electronicpurchasing (EProcurement),SCM
(Supply Chain Management), Processing orders electronically, Customer Service & Cooperation with business
partners.
OneoftheobjectivesofeBusinessistoprovideseamlessconnectivityandintegrationbetweenbusinessprocesses
and applications external to an enterprise and the enterprises back office applications sucha as billing, orger
processing, accounting, inventory and receivables, and services focused to total supply chain management and
partnership includingproductdevelopment, fulfillment,anddistribution. In this respect,eBusiness ismuchmore
thaneCommerce.
TosucceedineBusinessitiscrucialtocombinetechnologicaldevelopmentswithcorporatestrategythatredifinesa
companys role in the digital economy while taking into account its various stakeholders. It is imperative to
understandtheissues,evaluatetheoptions,anddeveloptechnologyorientationplans.AneBusinessstrategyhelps
organizations identify their eBusiness concerns, assess their information needs, analyze towhat degree existing
systems serve theseobjectives,pinpoint specific improvements,determine thedevelopment stagesofeBusiness
solutionsandattainconcreteandmeasurableresults.Thus, it isclearthateBusinesssolutionsarenotonlyabout
technology.
AclassicexampleisSAPsystemsintegrationsforanyorganization.This itself istakenupasaprojectandexecuted
withgreatattention todetail.Aminute logicalerror in interpretationof the firmsobjectives could result in the
entiresystembeingreworkedfromscratch.
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EBusiness allows for redefinitionof value, competitiveness and the verynatureof transactionsand it affects all
areasofanorganization. Itiscrucialtocombinetechnologyandbusinessstrategywhiletakingintoaccountvarious
stakeholders
AnEbusinessStrategyhelpsto
Identifyebusinessconcerns
Assessinfoneeds
Analyzeexistingsystems
Improvementsrequiredinexistingsystems
Determinethestagesofdevelopmentofsolutions
Attainconcreteandmeasurableresults.
Characteristicsofe-Business
To emphasize, eBusiness is not simply buying and selling but encompasses the exchange of many kinds of
information, include online commercial transactions. EBusiness is about integrating external company processes
withanorganizations internalbusinessprocesses;assuch,avarietyofcorebusinessprocessescouldexploitane
Businessinfrastructure.
Theseincludeamongothers:
CollaborativeProductDevelopment
CollaborativePlanning,ForecastingandReplenishment
ProcurementandOrdermanagement
OperationsandLogistics
CollaborativeProductDevelopment
This isoneofthefastestgrowingtechnologies inengineeringwithsomeformofsolutionsbeing implemented ina
range of industries such as automotive, aerospace, agricultural machinery etc. It contributes towards making
productsinashorttimespanwhilemaintainingqualityandreducingcost.
Italsoaidsinmaximizingtimetomarketbenefitswhilemaintainingcontroloverproductdevelopmentinformation.
Byintegratingdesignandtestingcyclesofproductswiththoseofsuppliers,afirmcanshortenthecompletecycleof
itsproducts.Thisclearly,reducesthetotalcostoftheproductcycle,&evenmore importantly, itreducesthetime
that is needed to bring products to the marketplace. Collaborative product development solutions offer ERP
integrationandSCM.
CollaborativePlanning,ForecastingandReplenishment
This isaprocess inwhichManufacturers,DistributorsandRetailerswork together toplan, forecastandreplenishproducts. In eBusiness relationships collaboration takes the form of sharing information that impacts inventory
levelsandmerchandiseflow.
Collaboration points:sales forecasts, inventory requirements,manufacturingand logistic lead times, seasonal set
schedules,new/remodelstorageplans,promotionalplansetc
Goal:Toget thepartnerstoworktogetherto improve lowersupplycycletimes, improvecustomerservice, lower
inventorycosts, improveinventorylevelsandachievebettercontrolofplanningactivities
ProcurementandOrdermanagement
Electronic procurement or EProcurement can achieve significant savings and other benefits that impact the
customer. To support procurement and order management processes, companies use an integrated electronic
orderingprocessandotheronlineresourcestoincreaseefficiencyinpurchasingoperations.
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Benefits: cost savings, better customer service by controlling the supply base, negotiating effective buying
preferences,andstreamliningtheoverallprocurementprocess.
Operations&Logistics
Logisticsisthatpartofthesupplychainprocessthatplans,implementsandcontrolstheefficient,effectiveflowand
storageofgoods,servicesandrelatedinformationfromthepointoforigintopointofconsumptioninordertomeet
customer requirements. To make this happen, transportation, distribution, warehousing, purchasing & order
managementfunctionsmustworktogether. LogisticsintheeBusinesseraisallaboutCollaboration thesharingofcriticalandtimelydataonthemovementofgoodsastheyflowfromrawmaterial,allthewaytotheenduser.
OperationsandLogisticsprocessesarebasedonopencommunicationbetweennetworksoftradingpartnerswhere
integratedprocessesandtechnologyareessential forhighperformance logisticsoperations. Thesesolutionshelp
managethelogisticsprocessbetweenbuyersandsuppliers,whileeliminatingcostlydiscrepanciesbetweenpurchase
order,salesorderandshipping information.Byeradications thesevariancesand inconsistencies improvements in
thesupplychainmayresultfromtheeliminationofmixedshipmentsandshipmentdiscrepancies,andthereduction
of inventory carrying costs for the customer. At the same time this increases customer satisfaction through
improveddeliveryreliabilityandimprovedefficienciesinreceivingoperations.
Furthermore,therearecriticalelementstoebusinessmodelsaswell.Theyareasfollows:
A shared digital business infrastructure, including digital production and distribution technologies
(broadband/wirelessnetworks,contentcreationtechnologiesandinformationmanagementsystems),which
willallowbusinessparticipantstocreateandutilizenetworkeconomiesofscaleandscope.
Asophisticatedmodelforoperations,includingintegratedvaluechainsbothsupplychainsandbuychains.
Anebusinessmanagementmodel,consistingofbusinessteamsand/orpartnerships;
Policy, regulatory and social systems i.e., business policies consistent with ecommerce laws, tele
working/virtualwork,distanceslearning,incentiveschemes,amongothers.
Ease
of
Automated
Processing A payer can now cheaply and easily automate the generation and
processing of multiple payments with minimal effort. Previously, the dependency upon banks to handle
most payments and the lack of a cheap, ubiquitous communications technology made automation of
paymentprocessesexpensiveanddifficulttoestablish.
ImmediacyofresultPayment immediacyoccursbecauseautomationandtheabilityforthe intermediate
systemsandproviderstoprocesspaymentsinrealtime.Withthemoremanual,paperbasedsystemsthere
wasalwaysatimedelayduetotherequirementforhumaninterventionintheprocess.
Opennessandaccessibility Theavailabilityofcheapcomputingandcommunicationstechnologyandthe
appropriate software enables small enterprises and individuals to access or provide a range of payment
services that were previously only available to large organizations via dedicated networks or the
transactionalprocessingunitsofbanks.
Loss of collateral information The new technology dispenses with, or alters, collateral information
accompanying transactions.This informationhas traditionallybeenpartof the transaction,andhasbeen
relieduponbythetransactingpartiestovalidateindividualpayments.
Collateralinformationcanbedefinedasinformation:
Whichisnotessentialtothemeaningandintentofatransaction;
Which is typically incidental to the nature of the communications channel over which the transaction is
conducted;butneverthelessprovidesusefulcontextual information foroneormoreof theparties to the
transaction?
Collateral
information
can
include
many
things
ranging
from
tone
of
voice
in
a
telephone
call
to
the
business
cardsandletterheadsandapparentauthorityofthepersonwithwhomyouaredealing.
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Customerrelationshipmanagement(CRM)
CRMsystemsarefrontofficesystemswhichhelptheenterprisedealdirectlywithitscustomers.CRM(definition)
is the process of creating relationships with customers through reliable service automated processes, personal
informationgathering,processingandselfservicethroughtheenterpriseinordertocreatevalueforcustomers.
Thereare3categoriesofuserapplicationsunderCRMs:
Customerfacing applications:
Applications which enable
customers to order products and
services
Salesforce facing applications:
Applications thatautomatesomeof
the sales and salesforce
managementfunctions,andsupport
dispatchandlogisticfunctions.
Managementfacing applications:
Applicationswhichgatherdatafromprevious apps and provide
management reports and compute
Returnon relationships(RoR)asper
companysbusinessmodel
EnterpriseResourcePlanning(ERP)
ERPsareoftencalledbackofficesystems.ERPsystemsaremanagement informationsystemsthat integrateand
automate many of the business practices associated with operations or production aspects of a company. ERP
software can aid in control of many business activities such as sales, delivery, production, billing, production,
inventory,shipping,invoicingandaccounting.
A typical ERP system is designed around these 4
primarybusinessprocedures:
Production: manufacturing, resource planning
andexecutionprocess
Buyingaproduct:procurementprocess
Sales of a product and services: customer
ordermanagementprocess
Costing, paying bills, and collecting:
financial/management accounting and
reportingprocess.
SupplyChainManagement(SCM)
Supplychain(definition)isanetworkoffacilitiesanddistributionoptionsthatperformthefunctionsofprocurement
ofmaterials, transformationof thesematerials into intermediateand finishedproducts,anddistributionof these
finishedproducts tocustomers.SCMdealswith theplanningandexecution issues involved inmanagingasupply
chain.
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Supplychainhas3mainparts
Supply side: concentrates on
how,where from,andwhen raw
materials are procured and
suppliedtomanufacturing.
Manufacturingside:convertsraw
materialstofinishedproducts. Distribution side: ensures that
finished products reach the final
customers through a network of
distributors, warehouses and
retailers.
KnowledgeManagement
This relates to the identification and analysis of available and required knowledge assets and related processes.
KnowledgeassetsencompasstwothingsInformationandExperience.Knowledgeassetscompriseofallknowledge
thatabusinesshasorneedstohaveinordertogenerateprofitsandaddvalue.
Knowledgemanagement includes the subsequentplanningandcontrolofactions todevelopboth theknowledge
assetsandtheprocessestofulfillorganizationalobjectives.Knowledgeisastrongdenominatorofabusinessmodel
anddeterminesbusinesscompetenciesespeciallywhenuniquetothebusinessandsomustbekeptinhouse.
E-Markets
EMarket isanelectronicmeetingplace formultiplebuyersandsellersprovidingmanyparticipantswithaunified
viewofsetsofgoodsandservices,enablingthemtotransactusingmanydifferentmechanisms.AneMarketuses
Internettechnologytoconnectmultiplebuyersandsuppliers.
E-Business
Roles
and
their
challenges
TherearetwomainrolesintheEbusinessscenario:
o TheBuyer:BuyersareorganizationsthatpurchasegoodsandservicesdirectlyfromSuppliers.
o TheSupplier:Suppliersareorganizationsthatmarketandsellgoodsorservicesdirectlytobuyersor
indirectlythroughdiversesaleschannels includingWebbasedprocurementsystemsandelectronic
marketplaces.
SupplierstypicallyprovidebuyerswithwebbasedservicesnecessaryforcompletingeBusinesstransactions.
Buyers (customers) can thus reviewproduct information, receive customer service,ordering servicesand
customizationsupportfacilitiesancansubmitormodifyorders.
AnadditionalroleisthatofMarketMakers
thatarethirdpartyorganizationsthatrunemarkets.
Eachrolehasdistinctbusinessandtechnicalchallenges,buttheyallcoalescearoundacommonpoint.
Forbuyersaswellas for suppliers, theprimary challenge is theability to reacha criticalmassof trading
partnersandtransactionvolumetosustaintheirbusiness.
Forsuppliersespecially,thefollowingchallengesexist:
o Managing multiple selling channels, based on various technologies, protocols, data formats, and
standardbusinessprocesses.
o Having the ability to takemultiple typesofordersonce the customerhas decided to conduct e
Businessenabledordermanagementthroughthevarioussellingchannels.
o Having theability todifferentiateand customizeproductsand services fromother suppliers,and
offeringthemthroughthevarioussellingchannels.
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o Having theability toadaptandgrow theeBusinesswithout incurringdrastic technologychanges,
lrestructuring.organizationa
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o Andsweepingchangesinthebusinessprocess,orradicalnewinvestments.
Tomeettheneedsofbuyersandsuppliers,eBusinessstrategyandsolutionsmustbebuiltonthefollowing
basicprinciples:
o Empoweringsuppliers&buyers:
Differentchannels.
o Enablingsuppliersofallsizes:
E-Business
Requirements
Identify/measure quantifiable business objectives:companiesmustaccuratelymeasure the impactane
Business initiativehasontheirbusinessprocessesanddecidewhetherthis initiative isworthpursuingand
hassustainablelongtermeffects
Ensure organizational/operational flexibility: Enterprises must reposition themselves in their mission,
structureandexecutiontoprosperinasubstantiallymoredynamicenvironment.
Rethink entire company supply chains: companies must rethink their entire supply chains in order to
optimize performance and value as they seek to better integrate with suppliers and customers, share
information,interlinkprocesses,andoutsourcemanufacturinglogisticssystemsandmaintenanceactivities.
Transformthecompanytoaprocesscentricform: Companiesmustbeconceptualizedasasetofbusiness
processes with more emphasis on maximizing the efficiency of processes rather than departmental or
functionalunits.
Define Business processes: companies must create models of existing processes and interactions
determining the relevant events, time frames, resources and costs associated with business processes,
hencemakingthemwelldefinedandmeasurable
Understand Security requirements: the breadth of access and interaction requirements of a eBusiness
solutionrequirestheabilitytoprovidecontrolledandfocusedaccessbyalltheusers.
Align business organizations with a flexible IT architecture: in response to demands for end to end e
Businesssolutions,companiesareexpandingtheirapplicationstoincludeenhancedintegrationcapabilities.
Thisincludesintegrationofbusinessprocessesatvariedlevelsfromapplicationsanddataacross(andwithin)organizations.
Establish ubiquity within standards: Noneof themany integration technologiesavailable fromvarious IT
vendors has achieved complete coverage. These do work within organizations but not across global
enterprises and between separate enterprises. Attempts are made to establish open standards for
interoperability.
A number of business and tech. driven requirements are compelling forces that enable successful
development&deploymentofintegratedendtoendeBusinessapplications.Someoftheseare:
o Efficientbusinessprocessmanagementtechnology
o Efficientb2bcommunication
o Efficiententerpriseapplicationintegrationtechnology
o
Othercategorizationsviewtheproblemdifferently.
AmorebasicapproachtoviewingeBusinessrequirementsisasfollows:
Trust The biggest requirement for running a successful ebusiness is trust. In this ageof Facebookand
MySpace, online merchants may think that privacy of a customer's information isn't important, but the
oppositeistrue.
o Thus, businesses must be trustworthy to operate online. Consumers will not simply give theirfinancialinformationtojustanyone,soasitewilllosebusinessifconsumersdonotfeelcomfortable
thatitisareliable,upstandingcompany.
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o Companiesmusthavecomprehensiveprivacypoliciesandstickwiththem.Anothergood ideaisto
getdigitalcertificatesandTRUSTeseals,whichareawardedbythirdpartyorganizationsafterthey
researchthelegitimacyofanonlinewebsite.
o Suchawardsputconsumers'mindsatease.Finally,evenifanebusinessdoesallthis,itmustalsobe
trustworthy in the sense of fulfilling its promises: be up front with consumers about pricing and
deliverytimes.
Privacypolicy Inadditiontothewayprivacylawsapplyinthe"real"world,therearesomespecialthingsto
thinkaboutwhendealingwiththeInternetandebusiness.
Youshouldfullyunderstandhowyourwebsitefitsintoprivacylawrequirements.
If your website collects personal information, you should develop a proper and legally
compliantprivacypolicyandpostitinareadilyvisiblelocationonyourwebsite.
Ifyouusecookiesorsimilarmeanstotrackvisitors,dependingonhowyoudothat,youmay
stillneedtodevelopandpostapolicy.
Onlineprofilingmayrequiretheconsentoftheindividualdependingonthecircumstances.
Keep inmind that people do look for privacy policies so,without a policy, youmay lose
prospectivecustomers.
Aproperlydraftedprivacypolicyorstatementwillnotonlyminimizeyourlegalexposure,it
can serveamarketing functionaswell,allowingyou toattractand retaincustomerswho
otherwisemightnotbeasinclinedtodealwithyou.
Donotcreateapolicyandthen failto follow itprecisely.This isan invitation fordisaster,
includingnotonlypossiblelegalproblems,butalsoinjurytoyourreputationandgoodwill.
o Itisimportanttonotjustletthepolicysitonceithasbeenposted.Itshouldberevisitedregularlyto
determinewhetherornotit isstillaccurateandtoevaluatewhetherornot itshouldberevisedto
assistyouinyourbusinessgoalsandobjectives.
Strategy Ecommercemerchantsmustalsohavea strategy to succeed in theonlinemarketplace.Many
peoplestartwebsitesbecausetheythinkitisaquickandeasywaytomakecash,butinfactittakesamuch
greaterinvestmentthanmostpeopleexpect. Therefore,beforelaunchingasite,businessesmusthavestrategiestohandleissueslargeandsmall:
o Howconsumerswillplaceorders,
o Howdeliverieswillbemade,
o Howcustomerserviceissueswillbehandled?
o Morebroadly,howmuchdoownersexpecttoearnoveracertainperiod,howwillconsumersfind
thesite,andhowwillsuccessbejudged.
o Onlinemerchantswithoutstrategieswillsoonbeoverwhelmedbysuchissues.
Suitability Finally, merchantsmust decide if their products are suitable for the web. Requirements for
successfulebusinessesconcernthegoodsandservicesthemselves:
o Cantheybedeliveredquicklyandcheaply?
o Dotheyappealtopeopleoutsideasmallgeographicarea?
o Willgoingonlinesavemoney?
o Willthebenefitsoutweighthecosts?
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TechnologicalRequirements:
o AchievingReal
Time
Flexibility:Intheory,digitalthingsareeasiertochangethanphysicalthings.It
is faster toeditamemousingawordprocessorthanatypewriter (andyoudontget inkonyour
fingers).
o Butwhenprogrammingisrequiredtochangecontentoraccesspolicies,maintainingacomplexWeb
sitecanrangefromoneroustoimpossible.Marketfactorschangeinrealtime,andsomustthelogic
andcontentofaneBusinesssite.
o To achieve this vision, the next generation of eBusiness systems must provide a framework for
automatedinformationexchangebetweenallthestakeholdersinabusiness.
o Thesenew frameworksaredesigned for flexibilitysocompaniescanchangecontentandbusiness
logicinrealtimetomeetchangingbusinessneedsandmarketconditions.
o Thisadaptabilitycomesfromasetofcoreservices,commontoallapplications,whichenablerapid
deployment of new applications and new information and which work together to create a
compelling,unifiedeBusinessenvironment.
o AneBusinessframeworkmustincludepackaged,readytodeployservicesfor:
o AnArchitectureForeBusiness AseBusinessmovesbeyondsimpletransactionstoencompassall
the complex processes through which a company provides value, information systems must
orchestratethefunctionofenterpriseapplicationsand informationresourcesfortotal information
flow. And they must empower business people with the tools to manage content publishing,
delivery, and access, so that business results dont depend on the IT departments programming
backlog.
o Three TierObject CenteredDesign Toachievetrue,realtimeeCommerce,nextgeneratione
Business systemsmustbebuiltarounda3tierapplicationparadigmwitha clearabstractionand
true separation of user interface presentation, business logic, and content. Separation and
abstractionoftheselayersisachievedthroughtheuseofbusinessobjects,particularlyinthemiddle
layer.
o Whenseparatingpresentation,application,andDataLogicthreethingsmustbeconsidered:
User Interface The user interface must support a variety of interface mechanisms,
includingWebbrowsers forusers,businessmanagers,designersanddesktopapplications
fordevelopers.
BusinessLogic Themiddletiermustnotonlyimplementandexecutebusinesslogic,itmust
alsoprovide the frameworkof services thatenableeBusiness, including security services,
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transaction services, and caching, pooling, and other load balancing services to improve
overallsystemperformance.
Content The content layer includes corporate databases, document stores and other
knowledgerepositories
o AllObjectsAreNotCreatedEqual TheoverallarchitectureofaneBusinesssystem is important,but
proper abstractions achieved through object technology are the foundation of a flexible eBusiness
system.Correctseparationofpresentation,business logic,security functions,andcontentdetermines
the flexibility of the system and the pace and effectiveness of eBusiness processes. To deliver truly
dynamic,realtimecommunication,theserelationshipsmustbeestablishedonapertransactionbasis,
aseachpage isassembled fordelivery toausereBusinessprocesses lend themselves to thiskindof
abstraction.o BringingOrderToContentManagement Ascompaniesmovemoreof theirbusinessprocessesonto
theWebinsearchofgreatersalesorefficiency,Websitesaregrowinginsizeandcomplexity.StaticWeb
sitesoftenconsistofhundredsoreventhousandsofWebpages,andtensofthousandsoflinesofcode.
Multimedia sites are becoming the standard, with everything from sophisticated graphics and
animationtoaudioandvideo.EnterpriseWebsitesmustintegratemultipleapplicationsfromtheback
officetothesupplyandsaleschain,whilemaintainingsecurityandtheintegrityofbusinessinformation.
As sitesbecome largerandmore complex, traditionalWebpublishing systems,with theirhardcoded
Web page content, become unmanageable. Content creators swamp programmerswith requests for
newWebpages,theapprovalprocessbogsdown,andusersnolongerhaveaccesstocurrentcontent.
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o DynamicWebEnvironment ThegraphicallayoutsusedinnextgenerationeBusinesssystemsaremore
intelligentandmanageablethanthetemplatesusedintraditionalWebpublishing.Whilebothcontrol
placementofgraphicelements,style,etc.,templatesaccesscontentthroughbusinesslogichardcoded
intothebodyofthepage.Pageswithdifferentcontent,howeversimilar,requiredifferentsourcefiles.
Layouts,ontheotherhand,areanextgenerationapproachthatdoesnotembedbusiness logic inthe
presentationobjects.Alayoutcontrolsonlystyleandplacementofelementsonthepage.Thelogicthat
determinescontentisseparatefromthelayout,andcanbechangedandmaintainedindependently.
o ContentManagement
Tools
ContentManagementtoolsmustenablecontenttogrowandchangeat
Webspeed.
o TeamContentDevelopment PublishingcontenttotheWebandextendingthe functionalityofasite
takesawholeteam:developerstobuildsitestructureandimplementbusinessrules,designerstocreate
pagelayoutsanddefineaconsistentlookandfeel,andbusinessmanagerstodefinebusinessrulesand
contributecontent.
o CollaborationAcrossTheExtendedEnterprise PublishingandmanagingWebcontenttypicallyinvolves
anapprovalprocessandsomeadministrativework.
o CentralizedRules BasedContentManagement:Anyoneshouldbeabletomanagesitecontentsimply
bydefiningafewdocumentcharacteristicswhenadocumentispublished.Withcharacteristicssuchasa
documentstype (forexample,datasheet), format,andactivation/expirationdates inplace, linksto
the document can be automatically populated throughout the site, and document visibility and
documentmigrationcanbeautomated.
o CustomizedContentDelivery
o PervasivePersonalization
o KnowledgeBased Personalization Effective personalization depends on the ability to customize a
users experience based on a rich, centrally stored user profile: in essence, a knowledge base that
consistsofuser informationandexpertiseonhow toapply that information. Thiskindof knowledge
base cannot be bolted onto a brochure wareWeb site. The ability to gather and apply userrelated
knowledgemustbe integrated into theeBusiness system from day one, so that information can becontributed,shared,andleveragedbyalltheapplicationsinthesystem.
o User profiles are the crownjewels of an eBusiness strategy. The quality of profiles determines the
degreetowhichtheuserexperiencecanbepersonalized.Profilescanandshouldbebuiltthroughboth
explicitandimplicitmechanisms.
o InclusiveSecurity
o ScalabilityToCompete AsmoreandmoreprocessesareadaptedtoeBusiness,aWebsitemaygrow
to support thousands of users, millions of documents and millions of transactions each day. An e
Businesssystemmusthavethepowertoperformfastandreliably,asabusinessgrows,whiledelivering
thedynamic,personalizedcontentnecessarytoachievebusinessgoals.
o EnterpriseIntegration
and
Transaction
Monitors
AnybusinessprocesscanbeWebifiedwithaCGI
interfaceorafewserverpages.Butisolated,eBusinessisaboutprovidingnewvaluebydoingbusiness
inafundamentallynewway.IntegrationisthegoalandtheheartofeBusiness:integratingandexposing
applicationsandcontent inapersonalizedwaytospeed,scaleand improvebusinessprocessesandto
engage,involve,andbuildlastingrelationshipswithcustomersandbusinesspartners.
o Transaction management guarantees that users have a consistent view of business information. For
example, theeBusinesssystemshouldpreventthecustomerfromcompletinganorderbasedonone
price, thenbeingchargedbasedon thenewprice.Transactionmanagementalsoprevents inaccurate
resultsbasedonsystemfailures(e.g.,thesystemgoesdownandlosesanorderbutcontinuestoprocess
the
billing
using
already
transmitted
credit
card
information).
Robust
system
logs
can
help
coordinate
updates across multiple data sources from multiple vendors or roll back changes in case of system
failure.
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o DelegatedSystemManagement eBusinesssystemsaredistributedbytheirverynature,coordinating
informationsharingamongapplications,businessfunctionsanddepartments,andpartnersupanddown
thesupplychain.BringingbusinessprocessestotheWebincreasesthecomplexityoftheeBusinesssite,
andgrowingandchangingnumbersofusersandapplicationsincreasethecomplexityofmanagingasite.
No centralized IT department could effectively maintain current accounts or access privileges for all
users,insideandoutsidethecompany.MostWebsitestodayarenotsophisticatedenoughtoreachthis
roadblock,butasbusinessesopenandextend theirprocessesvia theWeb, systemmanageabilitywill
becomeanincreasinglyseriousissue.
o Time to MarketTime to market must be minimal as delays may result in losing the benefit of e
Businessintegration.
Impactsofe-Business
Improved operational efficiency and productivity: by eliminating operational waste and automation of
inefficientbusinesspractices,organizationscanrealizeproductivitygains
Reduction in operating costs and costs of goods and services: by connectingdirectlywith suppliers and
distributors, organizations can realize more efficient processes that result in reduced units of cost for
productsorservicesandlowerpricestocustomerswhileachievingeconomiesofscale.
Improvedcompetitive position:global reach, rapidgrowth,efficient reductionofproduct time tomarket
andoptimizationofproductdistributionchannelsallcontributetosuperiorcompetitiveposition.
Penetrationintonewmarketsthroughnewchannels:witheBusinesslocationisofnoconsequencewhenit
comestoreachingcustomers.
Improvedcommunication,informationandknowledgesharing:alignmentofkeysupplychainpartnerswith
anorganizationsinternalstrategieshelpsexploittheirexpertiseandknowledge,hencecreatingopportunity
tosecurelongtermbusinessbyembeddingtheirprocessandproceduresinthoseoftheircustomerssupply
chains.
Harmonizationandstandardizationofprocess
Improvedinternal
information
access
Improvedrelationshipswithsuppliersandimprovedcustomerservice
InhibitorsofeBusiness
Management/Strategyissues
o ebusinessstrategy
o Organizationalchangesrequiredbyebusiness
o Managementattitudesandorganizationalinflexibility
Cost/financingissues
o Costsofimplementationo CalculatingtheReturnonInvestment(ROI)
SecurityandTrustIssues
LegalIssues
o Fewcompaniesarefamiliarwiththerulesandregulationsthatapplytoanonlineenvironment.
ThisleadstoUncertainty.
o Differentstrokesfordifferentfolks!
TechnologicalConcerns
o IntegrationIssues
ArgumentsagainstInvestment
o Uncertainty&Fear
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E-BusinessStrategies
WhatisanE-BusinessStrategy?
EBusinesshastriggerednewbusinessmodels,strategiesandtacticsthataremadepossiblebytheinternet
andotherrelatedtechnologies.
In order to compete in the marketplace, it is essential for organizations to establish strategies for the
developmentofanebusiness.
EBusinessstrategycanbeviewedviatwodifferentviewpoints,whichareexplainedbelow.
Oneviewdefinesstrategyasplansandobjectivesadoptedtoachievehigherlevelgoals.
Inthatsense,astrategy isdevelopedtoachieveagoal like implementingorganizationalchange,ora large
softwarepackagesuchasanERPsystem.
Strategymayalsorelatetoplansconcerningthe longtermpositionofthefirminitsbusinessenvironment
toachieveitsorganizationalgoals.
Basedontheabove,wearriveatacommondefinitionforaneBusinessStrategy.
An eBusiness strategy is the set of plans and objectives by which applications of internal and external
electronicallymediatedcommunicationcontributetothecorporatestrategy.
Strategicplanningcomprisesadistinctclassofdecisions(aplanisasetofdecisionsmadeforthefuture)and
objectives, andhas tobepositionednext to tacticalplanning (structuring the resourcesof the firm) and
operationalplanning(maximizingtheprofitabilityofthecurrentoperations).
Strategy isconcernedwithchanges in thecompetitiveenvironmentthatmaytriggerstrategicchanges for
theindividualfirmandsoaffectitsrolesandfunctionsinthemarket.
Reassessmentofstrategymayoccurdueto:
o NewProducts
o Changingcustomerpreferences
Flowers:Roses/Carnations >Orchids
A
few
years
back
when
people
went
to
the
florist,
they
generally
picked
up
Roses
or
Carnations etc. Now, they prefer Orchids. This is an example of changing customer
preferences.Aglobalnotion isthatacustomerdoesnotrealizetheutilityoffeeltheneed
foraproductuntilitisofferedtohim/her.
o Changingdemandpatterns
o Newcompetitors
The frequency, dynamics and predictability of the above changes dictate the intensity of the strategic
planningactivityofthefirm.
So,eBusinessstrategy(revised)is:
o Thesetofplansandobjectivesbywhichapplicationsofinternalandexternalelectronicallymediated
communicationcontributetothecorporatestrategy.
EBusinessstrategymaybeimplementedfor:
o Tacticalpurposes:Mail>EDI>XMLFDI
o Achievingcorporatestrategyobjectives
EBusinessisstrategicinnature.
o Theideaistocreateapreferablysustainable&competitivepositionforthecompany.
This is achieved by integration of the Internet and related technologies in its primary
processes.
EBusiness must not only support corporate strategy objectives but also functional strategies (SCM,
Marketing)
SupplyChainManagementStrategy
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o Based on value chain analysis for decomposing an organization into its individual activities and
determiningvalueaddedateachstage.
o Gaugeefficiencyinuseofresourcesateachstage.
MarketingStrategy
o Isaconcernedpatternofactionstaken inthemarketenvironmenttocreatevalue forthe firmby
improvingitseconomicperformance.
o Focusedoncapturingmarketshareorimprovingprofitabilityviabrandbuildingetc.
o OperatesonCURRENTASWELLASFUTUREprojectionsofcustomerdemand.
InformationSystemsStrategy
o Howtoleverageinformationsystemsinanorganizationtosupporttheobjectivesofanorganization
inthelongrun.
EBusinessstrategyisbasedoncorporateobjectives.
StrategicPositioning
Strategicpositioningmeansthatafirmisdoingthingsdifferentlyfromitscompetitorsinawaythatdeliversaunique
valuetoitscustomers.Thereare6fundamentalprinciplesafirmmustfollowtoestablishandmaintainadistinctive
strategicposition:
1. Startwiththerightgoal:superiorlongtermROI.
2. Strategymustenableittodeliveravaluepropositiondifferentfromcompetitors.
3. Strategymustbereflectedinadistinctivevaluechain.
4. Accepttradeoffsforarobuststrategy.
5. Strategymustdefinehowallelementsofwhatafirmdoesfittogether.
6. Strategymustinvolvecontinuityofdirection.
Levelsofe-BusinessStrategies
Strategies will exist at different levels of an organization. Strategic levels of management are concerned with
integrating and coordinating the activities of an organization so that the behavior is optimized and its overall
direction is consistentwith itsmission. UltimatelyeBusiness isabout communication,withinbusinessunitsand
betweenunitsoftheenterpriseaswellasorganizations.
1) SupplyChainorIndustryValueChainlevel
EBusinessrequiresaviewoftherole,addedvalue,andpositionofthefirminthesupplychain.
Importantissuesthatneedtobeaddressedatthislevelare:
i. Whoarethefirmsdirectcustomers?
ii. Whatisthefirmsvalueproposaltothecustomers?
iii. Whoarethesuppliers?
iv. Howdoesthefirmaddvaluetothesuppliers?
v. What isthecurrentperformanceoftheSupplyChain intermsofrevenueandprofitability,
inventorylevelsetc?
vi. Moreimportantly,whataretherequiredperformancelevels?
vii. Whatarethecurrentproblemsinthechain?
This sortofanalysisgive insight into inupstream (supplier side)anddownstream (customer side)
dataandinformationflows.
2) TheLineofBusinessor(Strategic)BusinessUnitlevel
UnderstandingthepositioninthevaluechainisastartingpointforfurtheranalysisofhowInternet
relatedtechnologiescouldcontributetothecompetitivestrategyofabusiness. This is the level where competitive strategy in a particular market for a particular product is
developed(StrategicPositioning).
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Therearefourgenericstrategiesforachieving aprofitablebusiness:
i. Differentiation:Thisstrategyreferstoallthewaysproducerscanmaketheirproductunique
anddistinguishthemfromthoseoftheircompetitors.
ii. Cost:Adoptingastrategyforcostcompetitionmeansthatthecompanyprimarilycompetes
with low cost; customers are interested inbuying aproduct as inexpensively aspossible.
Successinsuchamarketimpliesthatthecompanyhasdiscoveredauniquebusinessmodel
whichmakesitpossibletodelivertheproductorserviceatthelowestpossiblecost.
iii. Scope:
Ascopestrategyisastrategytocompeteinmarketsworldwide,ratherthanmerely
inlocalorregionalmarkets.
iv. Focus:Afocusstrategyisastrategytocompetewithinanarrowmarketsegmentorproduct
segment.
3) TheCorporateorEnterpriselevel
Thislevelcomprisesacollectionof(strategic)businessunits.
Thisleveladdressestheproblemofsynergythroughafirmwide,availableITinfrastructure.
CommoneBusinessapplicationsthroughouttheorganizationareneededfortwobasicreasons.
Fromefficiencypointofview,havingdifferentapplications for the same functionality indifferent
areasofbusiness
isneedlessly
costly.
Fromaneffectivenesspointofview,thereistheneedforcrossLineofBusinesscommunicationand
shareabilityofdata.
Theemphasisinthebusinessplansisonthecustomer,notthefinalproduct.
TheseallbecomesubjectsofanenterprisewideeBusinesspolicy.
ThechangingcompetitiveAgenda:Business&TechnologyDrivers
BusinessDrivers:
Shiftineconomiesfromsupplydriventodemanddriven
o Causesashift
inintent
ofservice
and
quality
programs,
the
impetus
for
product
development
&the
structureoftheorganizationitself
o OnetoOnemarketing
o MassCustomization
TechnologicalDrivers:
Internet
o Pervasiveness
o InteractiveNature
o VirtualNature
StrategicPlanningProcess
Thestrategicplanningprocesshasthefollowingsteps:
Thestrategicplanningprocessstartswiththeestablishmentoftheorganizationsmissionstatement.
o The mission statement is a basic description of detailing the fundamental purpose of the
organizations existence and encompasses strategy development, including determination of the
organizationsvisionandobjectives.
o Itisdevelopedatthehighestleveloftheorganizationsmanagement,andprovidesageneralsense
ofdirectionforalldecisionmakingwithinthefirm.
Strategic
Analysis
o This involves situation analysis, internal resource assessment, and evaluation of stakeholders
expectation.
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StrategicAlignment
Inthe1980stheconceptofalignmentbetweenbusinessandITwasdeveloped.
Accordingtothisconceptitisnotonlyfeasibletodesignandbuildatechnicallysophisticatedinfrastructure
foreBusiness,butalsotoformulatebusinessstrategiesthatcomplementandsupportthisinfrastructure.
Oneof themajor issues regarding anenterprises investment in IT iswhether this is inharmonywith its
strategicobjectives.
Thisstateofharmonyisreferredtoasalignment.
Alignmentiscomplex,multifacetedandalmostnevercompletelyachieved.Itisaboutcontinuingtomovein
therightdirectionandbetteralignedthanthecompetitors.
AnyeBusinessstrategyshouldarticulateanenterprises intentiontouse informationtechnologybasedon
businessrequirements.
WhenformulatingtheITstrategy,theenterprisemustconsider:
o Businessobjectivesandthecompetitiveenvironment
o Currentandfuturetechnologiesandthecosts,risks,andbenefitstheycanbringtothebusiness.
o ThecapabilityoftheITorganizationandtechnologytodelivercurrent andfuturelevelsofserviceto
thebusiness.
o CostofcurrentIT,andwhetherthisprovidessufficientvaluetothebusiness.o Lessonslearnedfrompastfailuresandsuccesses.
Consequencesofe-Business
As eBusiness is an information technologyenabled organizational phenomenon with economic
consequences,economictheoriesappeartobeparticularlyusefulforanalyzingthebusinesseffects.
Strategyisaboutfindingtheright(external)fitbetweenorganizationandenvironment.Differentschoolsof
thoughthaveapproachedthisproblemfromdifferentangles.
WhenanalyzingthebusinesseffectsofaneBusiness,wewillconsiderthefollowingapproaches:
o TheTheoryofCompetitiveStrategy
o Theresourcebaseview
o Thetheoryoftransactioncosts
TheoryofCompetitiveStrategy
o Thestructuralattractivenessofafirmisdeterminedbyfiveunderlyingforcesofcompetition:
Thebargainingpowerofthecustomers
Thebargainingpowerofthesuppliers
Thebarrierstoentryfornewcompetitors
The
threat
of
new
substitute
products
or
services
Thecompetitionamongexistingfirmsintheindustry
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o In combination, these forcesdeterminehow theeconomic value createdby anyproduct, service
technologyorwayofcompetingisdividedbetweencompaniesinanindustry.
o Thebargainingpowerofcustomersforafirmcould,forinstance,dependonthedegreeofproduct
differentiation,and the sizeofdemandand supply.Switching costsarealsovery important: they
answerthequestionofhowmuchwillitcostthecustomertochangetoanothersupplier.
o Thebargainingpowerofsuppliersisdependentonavarietyoffactors,suchasrelativesize,number
of suppliers, that can deliver a critical resource, and so on. The Internet causes another specific
threatfromtheperspectiveofITsuppliers;theymaybypasstheircustomersanddirectlyapproach
theenduser.
o Thebarrierstoentryfornewcompetitorsdependonhowdifficultitistojointheindustry.Economic
andtechnologicalthresholdsmaypreventoutsidepotentialcompetitorstocome in.Economiesof
scale,necessarycapital,andspecializedexpertiseareimportantfactorsinthisrespect.
o The threatofsubstituteproductsdependson thequestionofwhetherotherproductscandeliver
addedvalueforconsumersinsteadofcurrentproductsintheabsenceofswitchingcosts.e.g.The
InternetisaseriousthreattothePostOffice.
o Thelevelofcompetitionamongexistingfirmsintheindustrywilldependonvariousfactorsliketype
ofmarket,existingcompetitivebehavior,andsoon.
TheResourceBasedView
o Accordingtothistheoryofeconomicdevelopment,innovationisthesourceofvaluecreation.
o Severalsourcesofinnovation(hence,valuecreation)areidentified:
Theintroductionofnewgoodsornewproductionmethods,
Thecreationofnewmarkets,
Thediscoveryofnewsupplysources,
Andthereorganizationofindustries.
o Theresourcebasedview(RBV),whichbuildsonthetheoryofeconomicdevelopmentsperspective
onvaluecreation,regardsafirmasacollectionofresourcesandcapabilities.
o TheRBVlooksatavailableresourcesfirsttoseehowapositioninthebusinessenvironmentcanbeacquiredwiththem.
o According to this view, a firm can build a strategic position by picking the right resources and
buildingcompetenciesthatareuniqueanddifficulttoimitate.
o Resourcesareconsideredtherawmaterialforbuildingcompetencies.
o The RBV states that marshalling and uniquely combing a set of complementary and specialized
resourcesandcapabilitiesmayleadtovaluecreation.
o A firms resources and competencies are valuable if, and only if, they reduce a firms costs or
improveitsrevenues.
o Corecompetenciesofanorganizationencompassknowledgebases,skillsets, andserviceactivities
thatcancreateacontinuingcompetitiveadvantage.
TransactionCostEconomics
o Transaction Cost Economics attempt to explain firms choices between internalizing and buying
goodsandservicesfromthemarket.
o Accordingtotransactioncosttheory,exchangeswithexternalfirmsentailavarietyofcoordination
costsassociatedwithvariousaspectsofinterfirmtransactions.
o Thecentralquestionaddressedbytransactioncosteconomics iswhyfirms internalizetransactions
thatmightotherwisebeconductedinmarkets.Thus,twokeyissuesconcerningfirmsare:
Whichactivitiesshoulda firmmanagewithin itsboundaries,andwhichactivitiesshould it
outsource?
Inwhichwayshouldafirmmanageitsrelationshipwithitscustomers,suppliers andother
businesspartners?
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o According to transaction cost economics, a firm has two options for organizing its economic
activities: an internal hierarchical structure where it integrates the activity into its management
structure,oramarketlikerelationshipwithexternalfirms.
o Criticaldimensionsoftransactionsinfluencingthechoiceofthemosteffectivegovernanceformare:
Uncertainty
ExchangeFrequency
SpecificityofAssetsenablingtheexchange
o Transactioncostsincludethecostsofplanning,adapting,executingandmonitoringtaskcompletion.
o Transaction cost Theory assumes thatmarkets arenotperfect, so lead to costs, like search and
monitoringcosts.
o As internet technology isexpected tosignificantly reduce transactioncosts, thistheoryprovidesa
basisforassessingtheeffectsoftheInternetonnewandexistingbusinessmodels.
SuccessfactorsforImplementationofe-BusinessStrategies
Transforminganenterprisefromatraditionalorganizationtoanebusinessbasedorganizationsacomplex
endeavor.
Itisessentialthatseniormanagementdevelopsandendorsesabroadstrategicvision.
Oncethestrategyhasbeendeterminedandapprovedtheimplementationstrategyhastobechosen.
Twoapproachesprevail:
o The topdown approach: According to this, business transformation is a businesswide
phenomenonthatcanonlybeimplementedbusinesswide.
o Thebottomupapproach: In thisapproach,business reengineering startsasanexperiment inan
inconspicuouspartofanorganization.Lessonsarelearntfromthisexperiment,andtheknowledgeis
transferredtootherpartsoftheorganization.
Although the bottomup approach has strong support , especially in the case of innovation, central co
ordinationofthetransformationactivityismandatory.
Toprovideforthecentralcoordination,programmanagementhastobeinstituted.Acorepartofprogrammanagementismultiprojectmanagement,themainobjectivesofwhichare:
o Recognizedependenciesbetweenprojects
o Sharescarceresourcesinanoverallefficientway
o Systematicallyutilizeexperiencesfromsingleprojects
Programmanagementischaracterizedby:
o Programorganization,
o Policies,
o Plans,
o Communication,
o Alignment.
Leading a change project or businesswide initiative requires persons that plan the change and build
businesswidesupport;thesearecalledchangeagents.
ChangeAgentsarepartoftheprogrammanagementorganization.
Inprinciple,everyoneinvolvedinachangeprojectcanassumetheroleofachangeagent.
Threetypesofchangeagentroleshavebeenidentified:
o Traditional:Inthetraditionalmodel,theInformationSystem(IS)specialistsfocusonthedeliveryof
theimplementationofthetechnology,withoutconsideringtheorganizationalaspects.Consequently
theybecometechnicianswithanarrowareaofexpertise.
o Facilitator:Inthefacilitatormodel,thecentralmodelisthatpeople,nottechnologiescreatechange.The change agentbrings together all the conditionsnecessary for the change. In thismodel, the
changeagentremainsneutral,theorganizationisresponsibleforthechange.
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o Advocate: In this role, change agents focus on inspiring people to adopt the change. Unlike the
facilitator,hedoesnotremainneutral,butusesanytactic(persuasion,manipulation,poweretc)to
makethechangesaccepted.
Especially in the case of eBusiness transformation, where organizational and IT changes relate to
infrastructureandissuesofcommonalityandinteroperability,theadvocatemodelseemstobeappropriate.
PressuresForcingBusinessChanges
Competitiono Fiercer&MoreGlobal
Customershavebecomeincreasinglydemanding
IntegratedDemand(Travel,CarRentaletc.)
Firmsaskthemselveswhichofmycompetencesareuniqueandofcoreimportance?
o E.g.>Bajajexitsthescootermarket.
Companyconfigurationchangesduetooutsourcingandinsourcing.
BusinessModels
Therearevariousdefinitions forBusinessModels.Thedefinitionschangebasedon theparadigmandthecontext
beingapplied.Letslookateachdefinition:
Participantsinajointbusinessventure:
o Specify the relationships between different participants in a commercial venture, the benefits &
costs to each and the flows of revenues. It addresses a simple equation (profit= revenuecost)
irrespectiveofthemodel.
o Describeshowtheenterpriseproduces,deliversandsellsitsproductsorservices,thusshowinghow
itdeliversvaluetothecustomerandhowitcreatedwealth.
Process&structureofabusinessorganization:
o Referstothestructures&processesinplacetooperationalizethestrategyofbusiness:
o Canbedescribedas:
Anarchitecturefortheproduct,service&informationflows;
Adescriptionofthevariousbusinessactors&theirroles;
Adescriptionofthepotentialbusinessbenefitsforthevariousactors;
Adescriptionofthesourcesofrevenues.
Perspectiveofamarketplace.
o Definitioncanbeanalyzedfromvariousperspectives:
B2B,B2Cactivitiesorboth?
Positioninthevaluechain?
Valueproposition&targetcustomers? Specificrevenuemodelsforgenerationofitsincomestreams?
Representation?PhysicalorVirtualorcombination?
PerspectiveofeBusiness
o A descriptive representation of the planned activities of an enterprise that involves 3 integral
componentswhichspecify:
Internalaspectsofabusinessventure
Type of relationships of the enterprise with its external business environment and its
effectiveknowledgeregardingtheserelationships
Howtheinformationassetsareembeddedinthebusinessventure.
Abusiness
model
can
be
viewed
as
an
externalization
of
afirms
internal
business
processes
o Doesnotinvolveinternalbusinessprocesscomplexity.
Whentakingtheinternalaspectsofabusinessintoaccountthefollowingelementsneedtobedefined:
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o ProductsorServices
o Sourcesofrevenue
o Activities
o Organizationofthefirm
E-BusinessModels
EBusinessmodelsareclassifiedasfollows:
InternetEnabled
o Categorizedbasedonincreasingfunctionality,innovation,integrationandvalue.
ValueWeb
o Assuredlynotarecipeforsuccessbutpreliminaryconceptionsofanemergingformofafluidand
flexibleorganization.
o Movefromwedoeverythingourselvesunless(valuegeneratedbysingleorganization)towedo
nothingourselvesunless(valuegeneratedbythenetwork).
EBusinessEnabled
o EspeciallyvalidforB2Bcontexts
o 5RepresentativeBusinessmodelso TeleworkingModel:
Collaborationusingcommunicationtechnologies
ClassicexampleisElectronicManufacturingServices(Solectron)
o VirtualOrganizationModel:
Collectionofgeographicallydispersedindividuals,groupsandorganizationalunits.
Example:GeneraLife(Insurance)
o ProcessOutsourcingModel:
Example:BPOs,IBM
o CollaborativeProductDevelopmentModel
Example:AutomobileManufacture>FORD
o ValueChainIntegrationModel:
Usedtoimprovecommunication&collaborationbetweenallsupplychainparties.
MarketParticipants
o MoregenericclassificationofInternetBasedBusinessModels
Cybermediaries
o IndisagreementwiththewidelyacceptedideathateBusinesswillcauseindustryvaluechainstobe
restructuredtosuchanextentthatintermediationwillnolongerbeaprominentfeature.
o Therealtrendmightjustbetowardsanincreaseinintermediationbycybermediaries.
Organizationswhichoperateinelectronicmarketstofacilitateexchangesbetween
producersandconsumersbymeetingtheneedsofboth.
DirectoriesofDirectoryServicesIntermediaries
VirtualMalls
WebsiteEvaluators
Auditors
SpotMarketMakers
FinancialIntermediaries(ESCROWServiceforOnlinepurchases).
Note:FordetailsonalleBusinessmodels,ReferMichaelPapazoglou,eBusinessOrganizational&Technical
Foundations
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IntegrationofApplications
e-BusinessIntegration(Patterns)
eBusinessIntegrationoccurs inasmanyformsasthereareeBusinesses.Atfirstglance, integrationproblemsand
the corresponding solutions are seldom identical. Yet, upon closer examination, you discover that integration
solutions can actually be classified into common categories. Each of these categories describes both a "type" of
integration problem as well as a solution method. These categories are called integration patterns. Integration
patternshelpyouunderstandthedifferentmethodsavailabletoyouforagiventypeofintegrationproblem.They
allowyoutotakeastepbackandunderstandthedifferences inthevariousscenariosandappreciatethedifferent
approaches to integration.Finally, theyallowyou toview"integration in thebigpicture."Youcan learn tobreak
downwhatmaybeacomplexintegrationintoconceptualcategoriesandunderstandwhichtechnologiestoapply.
WhatAreIntegrationPatterns?
Apatterniscommonlydefinedasareliablesampleoftraits,acts,tendencies,orotherobservablecharacteristics.In
softwaredevelopment,youmaybe familiarwith the ideaofdesignpatternsorprocesspatterns.Designpatterns
systematically describe object designs that can be employed for a common set of problems. Similarly, process
patternsdescribeprovenmethodsandprocessesused insoftwaredevelopment.Inpractice,patternsaresimplya
logical classification of commonly recurring actions, techniques, designs, or organizations. What are integration
patterns? Integrationpatternsemerge fromclassificationofstandardsolutions for integrationscenarios.Theyare
notpatternsofdesignorcode.Noraretheypatternsofoperationalprocesses foran integrationproject. Instead,
eachintegrationpatterndefinesatypeofintegrationproblem,asolutiontechnique,aswellasparametersapplied
foreBusinessIntegration.
FollowingaresevencommoneBusiness Integrationpatterns.Theyarenotmeant tobecomprehensive,butthey
covermostofthecommonintegrationscenariosimplementedtoday.TheyencompassbothEAIscenariosaswellas
B2Biscenarios:
EAI(intra
enterprise)
Patterns
1. DatabaseReplication
2. SingleStepApplicationIntegration
3. MultiStepApplicationIntegration
4. BrokeringApplication
B2Bi(interenterprise)Patterns
5. ApplicationtoApplicationB2Bi
6. DataExchangeB2Bi
7. B2BProcessIntegration
TheEAIPatterns representpatterns commonlyappliedwithina corporateenterprise,whereas theB2BiPatterns
representthedifferentmethods inconductingintegratedB2Btransactions.Thefollowingsectionsprovideacloser
lookateachofthesepatternsanddiscusssomeofthedetails.
DatabaseReplication
TheDatabaseReplicationpatternmaybethemostprevalentpatternofEAIintegrationtoday.Databasereplication
involvesmanagingcopiesofdataovertwoormoredatabases, resulting in redundantdata.Companiesengage in
databasereplicationfornumerousreasons.Onereasonisthatmanyorganizationsarebecomingmoredistributedin
their operations, requiringmultiple copies of the samedataover several physical locations.Replication is also a
means of data recovery. In many organizations, an active secondary database is maintained for data recovery
purposes.Intheeventthattheproductiondatabaseneedstoberecovered,thesecondaryreplicateddatabasecan
be used. This also applies for "high availability" systems. In these situations, a redundant copy of "live" data is
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maintainedtoensurethat ifthefirstsystem isnotavailable,theredundantdatabasesystem isactivated.Thetwo
generalcategoriesfordatabasereplicationaresynchronousandasynchronousreplication.
Single-StepApplicationIntegration
The SingleStep Application Integration (SSAI) pattern extends the asynchronous database replication pattern.
Instead of focusing on data consistency between two databases, the SSAI pattern integrates data between
applications,movingdatafromonecontexttoanother.Itdoessobytranslatingdatasyntaxofthesourcemessage
andreformattingdataelements intoanewtargetmessage. It is"singlestep"because itrequiresan intermediarybroker tomap sourcemessages to targetmessages. Typically, it is anextensionof the asynchronous replication
technology,inthatitutilizesMessageQueuingMiddlewaresuchasMQSeries.Itisjustaslikelytobeimplemented
withthelesssophisticatedFTPinabatchmode.Ineithercase,thepointisthatitdoesmorethansimplymovedata
frompointAtopointBforconsistencyssake.Whereas, inthereplicationpatternboththesourceandtargetdata
modelsarelikelysimilar,ifnotidenticalattimes,thisisnotnecessarilythecasefortheSSAIpattern.Theobjective
hereisnotdataconsistency,butapplicationdataintegration.
Multi-StepApplicationIntegration
The MultiStep Application Integration (MSAI) pattern is an extension of the SSAI pattern. MSAI enables the
integrationofn (source)tom (target)applications. Itaddressesmanytomany integration,whichSSAIcannot,byproviding what is known as sequential logical processing. In other words, steps in this pattern are processed
sequentially, and rules applied are Boolean logical in nature. Like the singlestep pattern, MSAI requires an
intermediarytobrokerthetransactionofdatabetweenapplications.Itisoftenbuiltaroundanasynchronousevent
based system and typically is implemented through the use of Message Queuing Middleware as well. The
asynchronouseventbasedapproachcreates loose coupling.Althougheach system isphysically independent, they
are logically dependent. In other words, interdependencies exist between the application events that can be
expressedintermsoftransformationsanddataintegrationrules.Dataelementsfromoneapplicationcandrivethe
retrievalorprocessingofmessages inanotherapplication.Thesimplestmultistepexample inFigure3.3 involves
threeapplications inwhichamessage fromapplicationA is combinedwithamessage fromapplicationB that is
reformattedforatargetapplicationC.ItiscommonforadataelementfromapplicationAtoactasakeytodrivethe
requestforinformationfromapplicationB.
BrokeringApplication
Attimes integrating twoapplications isnotprincipallyamatterof integratingdata,but integratingbusiness logic.
TheBrokeringApplicationpatternaddressestheuseofintermediaryapplication logicto linktogethertwoormore
applications.Inplainterms,itmeansthatcustomapplicationcodeiswrittencontaininglogictobrokerinteractions
between the disparate applications. This custom brokering application sits in the middle as an intermediary for
processingrequestsfromdifferentapplications
Theuseofthissolutionpatternisparticularlyapplicableinthescenariosbelow:
ApplicationsNeedtoReuseLogic
ApplicationsLinkedbyComplexLogic
ApplicationsUnifiedThroughUserInterface
Application-to-ApplicationB2Bi
Nowyou'rereadytomovebeyondEAItolearnaboutApplicationtoApplicationB2Bi,extendingintegrationbeyond
thecorporateenterprise. Iwilldescribe fouradditionalpatterns related specifically toB2B integration,beginning
firstwiththeApplicationtoApplicationB2Bipattern.TheApplicationtoApplicationpatternisthelogicalextension
ofwhatoccursinEAI.WhenEAIvendorstouttheirproductsasbeingB2Bi,thisspecificpatterniswhattheyhavein
mind.However,asyouwilldiscover, this isnot theonlypatternandvery likelynoteven theprimarypattern for
B2Bi.ApplicationtoApplicationB2Bi,which isoftenreferredtoas interenterprise integration, involvescorporate
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entitieslinkingtheirapplicationsdirectlytotheapplicationsoftheirpartnersorcustomers.Inpractice,thistypeof
integrationisoftenimplementedaspartofasupplychainofgoodsandservicestothecustomer.
Thisextensionforinterenterpriseintegrationmeansthatanumberofadditionalissuesneedtobeaccountedfor:
Security
FederatedControl
SystemsManagement
DataExchangeB2Bi
The limitation of theApplicationtoApplicationB2Bi pattern is that it can be more demanding to implement. It
necessitatesthateachparticipanthandlesandexternalizesapplicationnativedatadirectly.Thismakesitdifficultto
scaletheB2Binteractionmodelrapidlywhensuchademandisplacedontheparticipants.Theoptimalsolutionisto
providearapidlyscalableB2Bimodel inwhichparticipantscanexchangedatafreelywithminimalexpectationon
their infrastructure. The Data Exchange B2Bi pattern enables B2B transactions predicated on a common data
exchange format. It is themostwidelyappliedpattern forB2Bcommerce today.DataExchangeB2Bi iseffective
because it is simple in concept and has been in use since the days of Electronic Data Interchange (EDI), the
forerunnertotodaysB2BovertheInternet.
AlthoughthereisasignificantincumbencyoflegacyEDItransactions,theXMLbasedB2BwillultimatelydisplaceEDI
as the primary mechanism for eBusiness transactions. XMLbased data packets are transmitted between two
business entities through the use of a data exchange gateway service on both ends. One of the primary
responsibilitiesofthegatewayserviceistopreparethedatapacketsbyplacingthemwithinasecurityenvelope.The
B2BgatewayservicesupportssecuritystandardssuchasMIME,X.509,andS/Key.It isalsoresponsibleforrouting
datathroughastandardtransport.MostB2BgatewayservicesprovidenumeroustransportoptionsincludingHTTPS,
FTP, and TCP/IP Sockets.However,uponexamination, youwill find thatmostB2Bi transactions stilldeliverXML
documentsoveranHTTPSpipe.
B2BProcess
Integration
Even with industrywide initiatives such as RosettaNet, a pointtopoint data exchange that manages static
interactionshassome limitations. IfCorporationAwants topurchaseofficesupplies fromDepotX, itmustagree
aheadoftimeonthecontentofthedocumentsexchangedandbuyingprocess.This is,ofcourse,tobeexpected.
However,what if thesituation involvesmanagingmultiplesuppliersor ifthe interactionsbecomemorecomplex?
Forinstance,ascenarioinwhichsuppliersopenlybidtocompeteonpricingwillincreasethedimensionsofprocess
interactions.Inthatcase,managingtheB2Btransactionisnolongeranactivityofmanagingasinglepointtopoint
interaction.Instead,itbecomesachallengeofmanagingbusinessprocessesthataredynamicratherthanstatic.
TheB2BProcessIntegrationpatterntakesthelimitationsraisedbytheDataExchangepatternandaddressesthem
byprovidingBusinessProcess Integration (BPI) services. Justas theDataExchangepatternallowsparticipants to
managedataexchangesdynamicallythroughXMLbaseddocuments,theB2BProcessIntegrationpatternallowsthe
participantstomanageprocessesinthesameway.
Therefore,richer,morecomplexrelationshipscanoccurbetweentradingpartners.B2BProcessIntegrationpattern
canbeimplementedasoneoftwovariations:ClosedProcessB2BiorOpenProcessB2Bi.Youmightarguethateach
ofthesevariationsconstitutesanindividualpattern,butbecausetheysharethecommonattributeofbeingprocess
focused,IhavedecidedtotreatthemasvariationstotheB2BProcessIntegrationpattern.
ApproachestoMiddleware
Middleware iscomputersoftwarethatconnectssoftwarecomponentsorsomepeopleandtheirapplications.Thesoftwareconsistsofasetofservicesthatallowsmultipleprocessesrunningononeormoremachinesto interact.
Thistechnologyevolvedtoprovideforinteroperabilityinsupportofthemovetocoherentdistributedarchitectures,
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which are most often used to support and simplify complex distributed applications. It includes web servers,
application servers,and similar tools that supportapplicationdevelopmentanddelivery.Middleware isespecially
integraltomoderninformationtechnologybasedonXML,SOAP,Webservices,andserviceorientedarchitecture.
Middlewaresits"inthemiddle"betweenapplicationsoftwarethatmaybeworkingondifferentoperatingsystems.
It issimilartothemiddle layerofathreetiersinglesystemarchitecture,exceptthat it isstretchedacrossmultiple
systemsor applications.Examples includeEAI software, telecommunications software, transactionmonitors, and
messagingandqueueingsoftware.
Thedistinctionbetweenoperating systemandmiddleware functionality is, to someextent,arbitrary.While core
kernelfunctionalitycanonlybeprovidedbytheoperatingsystem itself,somefunctionalitypreviouslyprovidedby
separately sold middleware is now integrated in operating systems. A typical example is the TCP/IP stack for
telecommunications,nowadaysincludedinvirtuallyeveryoperatingsystem.
Insimulationtechnology,middlewareisgenerallyusedinthecontextofthehighlevelarchitecture(HLA)thatapplies
tomanydistributedsimulations. It isa layerofsoftware that liesbetween theapplicationcodeand the runtime
infrastructure. Middleware generally consists of a library of functions, and enables a number of applications
simulationsorfederatesinHLAterminologytopagethesefunctionsfromthecommonlibraryratherthanrecreate
themforeachapplication
DefinitionofMiddleware
Software thatprovides a linkbetween separate softwareapplications.Middleware is sometimes calledplumbing
because it connects two applications and passes data between them. Middleware allows data contained in one
database to be accessed through another. This definition would fit enterprise application integration and data
integrationsoftware.
ObjectWebdefinesmiddlewareas:"Thesoftwarelayerthatliesbetweentheoperatingsystemandapplicationson
eachsideofadistributedcomputingsysteminanetwork."
Middlewareiscomputersoftwarethatconnectssoftwarecomponentsorapplications.Thesoftwareconsistsofaset
ofservicesthatallowsmultipleprocessesrunningononeormoremachinestointeract.Thistechnologyevolvedto
provideforinteroperabilityinsupportofthemovetocoherentdistributedarchitectures,whicharemostoftenused
tosupportandsimplifycomplex,distributedapplications.
It includesweb servers, application servers,and similar tools that supportapplicationdevelopmentanddelivery.
MiddlewareisespeciallyintegraltomoderninformationtechnologybasedonXML,SOAP,Webservices,andservice
orientedarchitecture.
Insimulationtechnology,middlewareisgenerallyusedinthecontextofthehighlevelarchitecture(HLA)thatapplies
tomanydistributed simulations. It isa layerofsoftware that liesbetween theapplicationcodeand the runtime
infrastructure. Middleware generally consists of a library of functions, and enables a number of applications
simulationsorfederatesinHLAterminologytopagethesefunctionsfromthecommonlibraryratherthanrecreate
themforeachapplication.
OriginofMiddleware
Middlewareisarelativelynewadditiontothecomputinglandscape.Itgainedpopularityinthe1980sasasolution
totheproblemofhowto linknewerapplicationstoolderlegacysystems,althoughthetermhadbeeninusesince
1968.Italsofacilitateddistributedprocessing,theconnectionofmultipleapplicationstocreatealargerapplication,
usuallyoveranetwork.
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Useofmiddleware
Middlewareservicesprovideamorefunctionalsetofapplicationprogramminginterfacestoallowanapplicationto
(whencomparedtotheoperatingsystemandnetworkservices.):
Locatetransparentlyacrossthenetwork,thusprovidinginteractionwithanotherserviceorapplication
Filterdatatomakethemfriendlyusableorpublicviaanonymizationprocessforprivacyprotection(for
example)
Beindependentfromnetworkservices Bereliableandalwaysavailable
Addcomplementaryattributeslikesemantics
Middleware offers some unique technological advantages for business and industry. For example, traditional
databasesystemsareusuallydeployed inclosedenvironmentswhereusersaccessthesystemonlyviaarestricted
networkorintranet(e.g.,anenterprise'sinternalnetwork).WiththephenomenalgrowthoftheWorldWideWeb,
users can access virtually any database for which they have proper access rights from anywhere in the world.
Middleware addresses the problem of varying levels of interoperability among different database structures.
Middleware facilitates transparentaccess to legacydatabasemanagement systems (DBMSs)orapplicationsvia a
webserverwithoutregardtodatabasespecificcharacteristics .
Businessesfrequentlyusemiddlewareapplicationstolinkinformationfromdepartmentaldatabases,suchaspayroll,
sales,andaccounting,ordatabaseshoused inmultiplegeographic locations. In thehighly competitivehealthcare
community, laboratoriesmake extensive use ofmiddleware applications for data mining, laboratory information
system (LIS)backup,and tocombinesystemsduringhospitalmergers.Middlewarehelpsbridge thegapbetween
separateLISsinanewlyformedhealthcarenetworkfollowingahospitalbuyout.
Wirelessnetworkingdeveloperscanusemiddlewaretomeetthechallengesassociatedwithwirelesssensornetwork
(WSN),orWSNtechnologies.ImplementingamiddlewareapplicationallowsWSNdeveloperstointegrateoperating
systemsandhardwarewiththewidevarietyofvariousapplicationsthatarecurrentlyavailable.
Middlewarecanhelpsoftwaredevelopersavoidhavingtowriteapplicationprogramminginterfaces(API)forevery
controlprogram,by serving as an independentprogramming interface for their applications. ForFuture Internet
network operation through traffic monitoring in multidomain scenarios, using mediator tools (middleware) is a
powerfulhelpsincetheyallowoperators,searchersandserviceproviderstosuperviseQualityofserviceandanalyse
eventualfailuresintelecommunicationservices.
Finally,ecommerceusesmiddlewaretoassistinhandlingrapidandsecuretransactionsovermanydifferenttypesof
computer environments. In short,middlewarehas become a criticalelement across abroad rangeof industries,
thankstoitsabilitytobringtogetherresourcesacrossdissimilarnetworksorcomputingplatforms.
Typesofmiddleware
Hurwitz's classification system organizes the many types of middleware that are currently available. These
classificationsarebasedonscalabilityandrecoverability:
Remote Procedure Call Client makes calls to procedures running on remote systems. Can be
asynchronousorsynchronous.
MessageOrientedMiddlewareMessages sent to the clientare collectedand storeduntil theyare
actedupon,whiletheclientcontinueswithotherprocessing.
ObjectRequestBrokerThistypeofmiddlewaremakesitpossibleforapplicationstosendobjectsand
requestservicesinanobjectorientedsystem. SQLorientedDataAccessmiddlewarebetweenapplicationsanddatabaseservers.
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Embedded Middleware communication services and integration interface software/firmware that
operatesbetweenembeddedapplicationsandtherealtimeoperatingsystem.
Othersourcesincludetheseadditionalclassifications:
Transaction processing monitors Provides tools and an environment to develop and deploy
distributedapplications.
Application servers software installed on a computer to facilitate the serving (running) of other
applications.
EnterpriseServiceBusAnabstractionlayerontopofanEnterpriseMessagingSystem.
RPC
In computer science, a remote procedure call (RPC) is an interprocess communication that allows a computer
programtocauseasubroutineorproceduretoexecuteinanotheraddressspace(commonlyonanothercomputer
onasharednetwork)withouttheprogrammerexplicitlycodingthedetailsforthisremote interaction.That is,the
programmerwritesessentiallythesamecodewhetherthesubroutineislocaltotheexecutingprogram,orremote.
Whenthesoftware inquestionusesobjectorientedprinciples,RPC iscalledremote invocationorremotemethod
invocation.Notethattherearemanydifferent(oftenincompatible)technologiescommonlyusedtoaccomplishthis.
Historyand
origins
TheideaofRPC(RemoteProcedureCall)goesbackatleastasfaras1976,whenitwasdescribedinRFC707.Oneof
thefirstbusinessusesofRPCwasbyXeroxunderthename"Courier"in1981.Thefirstpopularimplementationof
RPC on Unix was Sun's RPC (now called ONC RPC), used as the basis for NFS (Sun). Another early Unix
implementationwasApolloComputer'sNetworkComputingSystem(NCS).NCSlaterwasusedasthefoundationof
DCE/RPCintheOSF'sDistributedComputingEnvironment(DCE).AdecadelaterMicrosoftadoptedDCE/RPCasthe
basisoftheMicrosoftRPC(MSRPC)mechanism,andimplementedDCOMontopofit.Aroundthesametime(mid
90's), Xerox PARC's ILU, and the Object Management Group's CORBA, offered another RPC paradigm based on
distributedobjectswithaninheritancemechanism.
Messagepassing
AnRPC is initiatedbytheclient,whichsendsarequestmessagetoaknownremoteservertoexecuteaspecified
procedure with supplied parameters. The remote server sends a response to the client, and the application
continuesitsprocess.Therearemanyvariationsandsubtletiesinvariousimplementations,resultinginavarietyof
different(incompatible)RPCprotocols.Whiletheserverisprocessingthecall,theclientisblocked(itwaitsuntilthe
serverhasfinishedprocessingbeforeresumingexecution).Animportantdifferencebetweenremoteprocedurecalls
andlocalcallsisthatremotecallscanfailbecauseofunpredictablenetworkproblems.Also,callersgenerallymust
deal with such failures without knowing whether the remote procedure was actually invoked. Idempotent
procedures (those that have no additional effects if called more than once) are easily handled, but enough
difficultiesremainthatcodetocallremoteproceduresisoftenconfinedtocarefullywrittenlowlevelsubsystems.
ThestepsinmakingaRPC
1. TheclientcallingtheClientstub.Thecallisalocalprocedurecall,withparameterspushedontothestackin
thenormalway.
2. The client stub packing the parameters into a message and making a system call to send the message.
Packingtheparametersiscalledmarshaling.
3. Thekernelsendingthemessagefromtheclientmachinetotheservermachine.
4. Thekernelpassingtheincomingpacketstotheserverstub.
5. Finally,theserverstubcallingtheserverprocedure.Thereplytracesthesameinotherdirection.
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Standardcontactmechanisms
Toletdifferentclientsaccessservers,anumberofstandardizedRPCsystemshavebeencreated. Mostoftheseuse
an interface description language (IDL) to let various platforms call the RPC. The IDL files can then be used to
generatecodetointerfacebetweentheclientandserver.ThemostcommontoolusedforthisisRPCGEN.
OtherRPCanalogues
RPCanaloguesfoundelsewhere:
Java's JavaRemoteMethod Invocation (JavaRMI)APIprovidessimilar functionality tostandard UNIX
RPC
methods.
Modula3'sNetworkObjects,whichwerethebasisforJava'sRMI
XMLRPCisanRPCprotocolthatusesXMLtoencodeitscallsandHTTPasatransportmechanism.
Microsoft .NET Remoting offers RPC facilities for distributed systems implemented on the Windows
platform.
RPyCimplementsRPCmechanismsinPython,withsupportforasynchronouscalls.
PyroObjectOrientedformofRPCforPython.
Etch(protocol)frameworkforbuildingnetworkservices. Facebook'sThriftprotocolandframework.
CORBAprovidesremoteprocedureinvocationthroughanintermediatelayercalledthe"ObjectRequest
Broker"
DRballowsRubyprograms tocommunicatewitheachotheronthesamemachineoroveranetwork.
DRbuses
remotemethodinvocation(RMI)topasscommandsanddatabetweenprocesses.
AMFallowsFlexapplicationstocommunicatewithbackendsorotherapplicationsthatsupportAMF.
LibeventprovidesaframeworkforcreatingRPCserversandclients.
WindowsCommunicationFoundationisanapplication
RMI
The JavaRemoteMethod InvocationApplication Programming Interface (API), or JavaRMI, is a Java application
programminginterfacethatperformstheobjectorientedequivalentofremoteprocedurecalls(RPC).
1. TheoriginalimplementationdependsonJavaVirtualMachine(JVM)classrepresentationmechanismsandit
thus only supports making calls from one JVM to another. The protocol underlying this Javaonly
implementationisknownasJavaRemoteMethodProtocol(JRMP).
2. InordertosupportcoderunninginanonJVMcontext,aCORBAversionwaslaterdeveloped.
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UsageofthetermRMImaydenotesolelytheprogramminginterfaceormaysignifyboththeAPIandJRMP,whereas
the term RMIIIOP (read: RMI over IIOP) denotes the RMI interface delegating most of the functionality to the
supportingCORBAimplementation.
Theprogrammersof theoriginalRMIAPI generalized the code somewhat to supportdifferent implementations,
suchasaHTTP transport.Additionally, theability topassarguments "byvalue"wasadded toCORBA inorder to
supporttheRMIinterface.Still,theRMIIIOPandJRMPimplementationsdonothavefullyidenticalinterfaces.
RMI functionality comes in the packagejava.rmi, while most of Sun's implementation is located in the sun.rmi
package.NotethatwithJavaversionsbeforeJava5.0developershadtocompileRMIstubsinaseparatecompilation
stepusingrmic.Version5.0ofJavaandbeyondnolongerrequirethisstep.
Jini offers amore advanced version ofRMI in Java. It functions similarly but provides more advanced searching
capabilitiesandmechanismsfordistributedobjectapplications.
Example
The following classes implement a simple clientserver program using RMI that displays a message. RmiServer
classListens to RMI requests and implements the interface which is used by the client to invoke remote
methods.
importjava.rmi.Naming;importjava.rmi.RemoteException;importjava.rmi.RMISecurityManager;importjava.rmi.server.UnicastRemoteObject;importjava.rmi.registry.*;public class RmiServer extends UnicastRemoteObjectimplements RmiServerIntf{static public final String MESSAGE = "Hello world";public RmiServer() throws RemoteException{super();}public String getMessage(){return MESSAGE;}public static void main(String args[]){System.out.println("RMI server started");// Create and install a security managerif (System.getSecurityManager() == null){System.setSecurityManager(new RMISecurityManager());System.out.println("Security manager installed.");}elseSystem.out.println("Security manager already exists.");try//special exception handler for registry creation{LocateRegistry.createRegistry(1099);System.out.println("java RMI registry created.");}catch (RemoteException e){//do nothing, error means registry already existsSystem.out.println("java RMI registry already exists.");}try{
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//Instantiate RmiServerRmiServer obj = new RmiServer();// Bind